The long term objective of this research is to understand the molecular mechanisms that control cell-cell signaling in developing and adult tissues. Hedgehog (Hh) signaling proteins control cell fates and proliferation during animal development by regulating the specific gene expression. In vertebrates, Hh proteins pattern diverse tissues such as the developing limb, spinal column, and brain. The membrane protein Patched (Ptc) opposes Hh to inactivate specific gene expression. In Drosophila, ptc mutations cause misexpression of Hh target genes and result in abnormal development and cell proliferation. Mutations in a human homolog of ptc, PTCH1 lead to the very common skin tumor, basal cell carcinoma, and to the brain tumor, medulloblastoma. PTCH1 is also mutated in the basal cell nevus syndrome, an inherited disorder characterized by many developmental defects and tumors. The molecular mechanisms of Hh signal reception and transduction are largely unknown. Central to understanding the role of Hh signaling in development and disease is learning how Ptc functions and identifying proteins with which it interacts. Ptc is proposed to bind Hh proteins and to associate with and regulate, Smoothened, (Smo), a membrane protein required for Hh signaling. Ptc also sequesters Hh to limit its range of action. How and where Ptc mediates these important regulatory processes is not known. Ptc may function in vesicle movement as suggested by its sequence similarity to NPC1, a membrane protein implicated in the intracellular trafficking of cholesterol. The proposed studies will identify the critical functional domains of Ptc and characterize the cellular localization of Ptc and its interacting proteins following ligand binding. Using Drosophila, new components of Hh signaling will be identified by a genetic screen involving a specific ptc phenotype.